Correlation Between China Mobile and Cogent Communications
Can any of the company-specific risk be diversified away by investing in both China Mobile and Cogent Communications at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining China Mobile and Cogent Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Mobile Limited and Cogent Communications Holdings, you can compare the effects of market volatilities on China Mobile and Cogent Communications and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in China Mobile with a short position of Cogent Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Mobile and Cogent Communications.
Diversification Opportunities for China Mobile and Cogent Communications
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between China and Cogent is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding China Mobile Limited and Cogent Communications Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogent Communications and China Mobile is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on China Mobile Limited are associated (or correlated) with Cogent Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cogent Communications has no effect on the direction of China Mobile i.e., China Mobile and Cogent Communications go up and down completely randomly.
Pair Corralation between China Mobile and Cogent Communications
If you would invest 856.00 in China Mobile Limited on October 23, 2024 and sell it today you would earn a total of 0.00 from holding China Mobile Limited or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Mobile Limited vs. Cogent Communications Holdings
Performance |
| Timeline |
| China Mobile Limited |
| Cogent Communications |
China Mobile and Cogent Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Mobile and Cogent Communications
The main advantage of trading using opposite China Mobile and Cogent Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Mobile position performs unexpectedly, Cogent Communications can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Cogent Communications will offset losses from the drop in Cogent Communications' long position.| China Mobile vs. SOUTHWEST AIRLINES | China Mobile vs. United Airlines Holdings | China Mobile vs. Harmony Gold Mining | China Mobile vs. SERI INDUSTRIAL EO |
| Cogent Communications vs. T Mobile | Cogent Communications vs. China Mobile Limited | Cogent Communications vs. Verizon Communications | Cogent Communications vs. ATT Inc |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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